Swedish bank uses stealth tactics to fight fraud

Swedish banks monitoring credit-card transactions to combat fraud

Several Swedish banks handle intrusions by surreptitiously monitoring credit-card transactions.

"We make a commercial assessment," said a spokesperson from Swedbank.

After determining that thousands of card numbers had been stolen in 2005, banks began monitoring large numbers of Swedish credit cards in order to spot frauds. Customers who had lost funds were compensated and some cards were replaced. However, the banks would not provide any information about the extent of the losses, but insisted that no customer lost money because of the fraud.

Clemens Wantschur, development manager at the Swedish Hotel and Restaurant Association, is highly critical of how banks handle security issues related to card payments. For the members of SHR, it is vital that customers trust card payments.

"Sometimes the banks demand that these affairs be kept secret. They want total secrecy. Anyone can understand that nobody wants the world to know that their cards aren't secure," he said.

Swedbank, which confirms that thousands of card numbers were stolen, says it operates an automatic monitoring system that alerts the bank in case of fraud.

Wouldn't it be better to write to all customers and say that "if you made any purchases during this period..."?

"That's not how it works. As a customer, you get your information when you get a new card. Outside of that, we cover any losses. We make a commercial assessment," says Anna Hammarskiold, press officer of Swedbank

What do you mean by a commercial assessment?

"If there are any transaction, we cover any costs. The customer never risks losing any money. We're not hiding this to anyone. Just because we don't communicate it to the media, it doesn't mean we haven't contacted our customers."

But your customers haven't been told that thousands of cards have been lost.

"I wouldn't say there's an inherent contradiction in that. We investigate our customers and our cards."

Kerstin Ottosson, press officer at SEB Retail Banking, says that only a few hundred stolen card numbers have been identified, but she doesn't deny that these could be only part of a larger fraud:

"We compensate our card users if they lose money because of frauds. There is no economic loss, but

it might still be unpleasant because of the intrusion in your privacy."

"Sophisticated systems" exist for discovering if illicit purchases or cash withdrawals are made with cards issued by the bank, she says. According to the bank, no SEB customers were victims of fraud this time.

"I will not divulge any details about our security systems," she says, "but we notice when things happen that shouldn't happen."

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